Housing starts weaker than expected

Aug Housing Starts totaled 571k annualized, 19k below estimates and down from 601k in July. After a steady increase over the past few months, multi family starts fell by 24k. Single family starts fell by 6k to 417k. Permits though saw an increase in each category, totaling 620k, 30k more than expected. To quantify the change in single family vs multi family construction seen over the past few years, single family starts are 263k higher than multi family compared to 1.489mm in Feb ’06. In terms of construction jobs, over the past 6 months, 3.526mm homes (both single and multi) have been completed vs the 3.482mm of new starts over that same time frame so many are now looking for more work. Bottom line and no surprise, single family starts continue to bounce along the bottom with the extraordinary competition from the supply of existing homes while multi family starts remain a bright spot as vacancies fall due to the fall in home ownership rates.

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